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Volvo to Invest $690 Million in India

BANGALORE—
Volvo
VOLVB -1.08%
AB will invest 38 billion rupees ($690million) in India over the next few years, the chief executive of the Swedish auto maker said Thursday.

An assembly line at Volvo's factory in Hoskote, near Bangalore, April 2006.
Dibyangshu Sarkar/Agence France-Presse/Getty Images

Of this, 18 billion rupees will be invested in the company's joint venture with India's
Eicher Motors Ltd
EQEICHERMOT -1.64%
,
Olof Persson
told reporters. The remaining investment will be in the company's own operations, he said.

Volvo, the world's number two global truck maker by revenue, and Eicher Motors hold equal stakes in their joint venture, VE Commercial Vehicles Ltd., which sells Volvo-branded trucks and Eicher-badged trucks and buses.

"With the investments that we are making here and the plans we have for the Indian market, we expect [sales] growth rates here to be higher than many other markets," he said.

Volvo's investment plans for India come as the company is experiencing slackening demand across Europe due to the region's economic troubles. Orders also are soft in North America as dealers reduce stock and customers lack confidence to invest.

India is building cross-country highways, ports, airports and railway lines to bolster growth.